Overview of India's Digital Economy
The Indian Council for Research on International Economic Relations (ICRIER) and Prosus Centre for Internet and Digital Economy (CIDE) report highlights significant insights into India's digital landscape.
Key Findings
- India as a Global Economy:
- Ranked as the 3rd largest economy in terms of GDP.
- However, it ranks 28th in the digital "user" economy.
- Digitalisation Levels:
- India has achieved high levels of digitalisation at a national level.
- Despite this, the average Indian experiences modest digital penetration in daily life.
- Internet Connectivity:
- The density of internet connectivity is comparable internationally.
- However, user spending in the digital economy is relatively lower.
Potential for Growth
- India's digital economy is expanding at double the rate of its overall economy.
- Projected to constitute one-fifth of the economy by 2029.
CHIPS Framework
The CHIPS framework evaluates India’s digital economy through various parameters:
- Access quality
- Affordability
- "Data intensity"
- Fintech industry development
- AI readiness
- Green energy investments
Despite some digital achievements, India ranks eighth when combining these metrics.
Strengths and Areas for Improvement
- Technological Harnessing:
- Indian users and firms excel in utilizing available technology.
- Attributed to high ICT services exports and significant IT sector market capitalisation.
- Regional Disparities:
- Southern and Western states are more digitally advanced than Eastern and Northern regions.
- Innovation and Challenges:
- India excels in decentralised finance and start-up culture.
- Challenges remain in Consumer IoT adoption, metaverse engagement, AI infrastructure, and research.
